Years after social networking sites became mainstream, banks are still trying to figure out the best ways to use them – and in particular, how to manage the risk and compliance issues connected to sites such as LinkedIn, Twitter and Facebook. BITS, the tech arm of the Financial Services Roundtable, this week issued a white paper attempting to provide an assessment of the various risks, as well as some mitigation strategies. BITS placed a particular focus on making customers aware of the fact that privacy rules of social networking sites don’t match those of most banks. It suggested that banks take steps to carefully vet the data aggregation that will take place if social media sites eventually merge.

Isis, the wireless carrier-led mobile payments venture, just crossed off an integral item on its to-do list in signing Visa Inc., American Express Co. and MasterCard Inc. Isis executives said Tuesday that its contractual agreements with the three networks will allow consumers to load their networks’ payment cards into a mobile wallet application scheduled for field trials next year. Specifically, Isis is licensing the networks’ contactless payments specifications for use in its software. Isis initially had a relationship with Discover Financial Services as its only card network. The deals with the other card brands “effectively lay the framework for any of the networks to get their cards, their payment applications, into the mobile wallet,” Jaymee Johnson, the head of marketing for Isis, said in an interview on Tuesday.

Saving money? Yeah, there’s an app for that-or at least there’s a blueprint for one. “Squirrel,” a project from Verity CU SVP/CMO Shari Storm, was recently named as the runner-up for the first annual COOP THINK Prize at CO-OP Financial Services’ annual THINK Conference. “Squirrel” was conceived as a smart phone app that lets users squirrel away money by diverting funds they would have spent on discretionary items into a savings account. “Credit unions have always promoted thrift,” noted Storm. “We’ve had Christmas clubs for decades, and this is the same concept, really.”

As new merchant-oriented rewards programs like Groupon and LivingSocial have become increasingly popular with consumers, banks have also begun to introduce merchant-funded rewards that can offer consumers a more targeted rewards experience than these e-mail discount services are able to offer. The bank-focused services, detailed in Javelin’s recent report – Evolving Rewards Strategies: How Merchant‐Funded Programs Will Usher in a New Era of Loyalty for FIs – enable precise targeting through analysis of anonymized transaction data. The beauty of the targeted merchant-funded rewards programs described is that neither the bank nor any other party knows the consumer’s particular interests.

More consumers are buying smartphones, but they’re not embracing mobile banking at the same pace — mostly because they have a misplaced fear of it, according to a survey released Tuesday. “Mobile banking is the next greatest thing in technology, but the surprising thing is that in spite of the powerful growth of the smartphone, the growth in those who did online banking hardly changed at all,” said Phil Blank, managing director of risk, fraud and security for Javelin Strategy and Research, which compared data from three different surveys taken since 2010. From 2009 to 2010, Javelin tracked a 60% surge in the number of smartphone users.

Even as the big banks stanch their losses, they are reckoning with an unfortunate reality: the anemic recovery is hurting their results. Second-quarter numbers on Tuesday from the nation’s two biggest consumer lenders, Bank of America and Wells Fargo, showed the toll the sluggish economy was taking on revenue growth. As Americans increasingly dig out of debt, lenders’ income is being reduced by a fall-off in mortgages, credit card and other types of consumer loans. Bank of America reported an $8.8 billion loss, after taking a $20 billion hit to clean up a raft of mortgage problems.